Taylor J. Smith wrote:
Now, a world oil glut appears to be developing.
Not according to the Atlanta Constitution today:
http://www.ajc.com/search/content/business/stories/2007/02/20/0220bizoil.html
"Saudis' cutbacks raise oil concerns
Some question country's reserves
Drivers who remember those $3-a-gallon days of the past two years, be warned.
Oil prices are up and the world's biggest
producer has been cutting back a recipe for those prices to keep on climbing.
But whether they are still arching skyward by the
time summer driving starts depends largely on
just why Saudi Arabia has been pumping less crude.
No one outside the kingdom really knows for sure,
but some oil experts think the Saudis' oil
reserves may not support increased production.
Official Saudi explanations for production cuts
cite the recent dips in global prices ...
. . .
The price of a regular gasoline averaged $2.10 a
gallon in metro Atlanta on Monday, up a dime in a
month, according to GasBuddy.com. During that
same period, the global price of oil has risen about 14 percent.
Meanwhile, Saudi production is reportedly down
about 1 million barrels a day from an average of
about 9.5 million barrels a day through much of 2005.
It is not just the decline that is troubling,
Hamilton said. "I don't know for sure what the
answer is, but I find the facts disturbing."
Cutbacks started when prices were high.
The Saudis have been nearly frantic in their recent drilling for more oil.
Some reports show the Saudis increasingly
relying on lower-quality, less valuable oil."
. . .
This is what Deffeyes and others who have been to
Saudi Arabia have been predicting for years.
So Bush will have to bomb the Iranian oil fields
in order to achieve an average 2007 price of $80 per barrel.
That is not necessary. The Iranians are
destroying their own oil fields without help from
us. Their fields are in such poor shape from
mismanagement and bad technology that the country
will soon not be able to produce enough for its
own domestic consumption. The problem can be
partially fixed by replacing obsolete equipment,
but much of the oil is gone forever. The
destructive methods used to be employed in the US
and Texas. They make much of the potential oil
impossible to extract economically. That is to
say, you can extract it, but that would take more
energy than you get from burning the oil, so there is no point.
- Jed
